Determinants of credit card delinquency and bankruptcy: Macroeconomic factors

In this paper, we examine how county unemployment rates affect consumers' delinquency and bankruptcy behavior by focusing on the credit card market. In particular, after controlling for credit supply and shocks like divorce and health coverage we investigate whether consumer propensity for delinquency and bankruptcy changes with respect to the macroeconomic fluctuations across counties. Our results show that county unemployment rates significantly influence delinquency. The views expressed are those of the authors and do not necessarily represent those of FleetBoston Financial.